Donors commit $5.9 billion for Indonesia
Donors commit $5.9 billion for Indonesia
PARIS (Agencies): Donor countries and institutions on
Wednesday pledged US$5.9 billion of assistance for Indonesia this
year but stressed the need for continued economic reform, a
smooth political transition and a stepped-up fight against
corruption.
The aid, to shore up Indonesia's 1999 budget and bolster the
government's efforts to pull the economy out of recession, was
announced by the World Bank after a meeting with around 30 donor
countries and institutions at the World Bank's Paris office.
"Indonesia's donors delivered a strong message today with a
pledge of $5.9 billion in foreign assistance for Indonesia for
fiscal year 1999/2000, in support of Indonesia's staying the
course of economic reform, continuing to protect the poor, and
stepping up the fight against corruption," the World Bank said in
a statement.
The World Bank, which hosted the meeting here, had called on
both the Indonesian government and donors to "stay the course" on
political and economic reform underway.
The donors also stressed the need for Indonesia to
complete "political transition", including a successful holding
of a referendum on self-determination for East Timor next month.
"We must not become complacent," warned Sven Sandstrom, the
World Bank managing director who chaired the Paris meeting.
The Indonesian government needs to "persevere and continue to
make good decisions in politically difficult times," he added.
The sum pledged was in line with Indonesia's earlier
expectations of $5.5 billion to $6.0 billion. It compares with
the $7.9 billion pledged - and the $6.2 billion actually handed
out - at the previous donors' meeting last year.
Sandstrom said there is no link of any "flow of resources" to
the planned referendum in the disputed territory of East Timor.
Donors are working on the assumption the referendum will go ahead
next month in a free and fair manner.
Indonesian Coordinating Minister of Economy and Finance
Ginandjar Kartasasmita said the economy is on the road to
recovery after its economic meltdown.
But, he added, "a return to the pre-crisis days of high growth
and accelerated poverty reduction is still far from assured" and
continued support from the international community was vital.
Ginandjar promised at the meeting that the government would
forge ahead unflinchingly with deep-rooted political and economic
reforms.
Indonesia was told during the talks that it could count on
continued financial support as long as it continued to root out
corruption, overhaul its banking and corporate system and work on
democracy following June's parliamentary election.
Ginandjar said the next consultative group meeting will take
place in January and will discuss Indonesia's external financial
requirements for the 2000/2001 fiscal year. The government will
likely seek assistance of less than $5.9 billion.
Japan
In a related development, Japan announced in Jakarta on
Wednesday afternoon that its delegation at the meeting in Paris
pledged a total $1.67 billion in new aid consisting of loans and
grants.
Kaoru Shimazaki, economic counselor at the Japanese embassy in
Jakarta, told reporters Japan was committed to supporting
Indonesia's economic recovery program but also asked the
(Indonesian) government to work harder to restore international
confidence.
"Indonesia needs to maintain its current political and
economic reform measures, especially the promotion of more
democratic and good governance and implemention of projects in
effective and transparent manner," Shimazaki told a news
conference.
Shimazaki said Japan's assistance consisted of 188 billion
Japanese yen ($1.57 billion) in loans and grants under the
Official Development Assistance (ODA) program and another 12
billion yen ($100 million) in loans from Japan's Exim Bank.
He said the $1.57 billion aid under the ODA program included
$600 million in Social Safety Net Adjustment Loan, $830 million
in pipeline disbursement allocated for health and nutrition
program and ongoing projects and $142 million in grant and
technical assistance.
"Japan will continuously support the social safety net program
to help socially vulnerable people.. and to ensure that
assistance from various donors, including Japan, will be used for
targeted people," Shimazaki said.
The $100 million loan from Exim Bank was specifically
earmarked as the Second Policy Reform Support Loan funds to
support Indonesia in improving its governance and administrative
ability, he said.
Shimazaki said Japan intended to continue to provide as much
assistance as possible to the new government of Indonesia.
He said, however, Japan has yet to make estimates on its new
aid commitments to Indonesia for the 2000/2001 fiscal year. (cst)